On Monday, Drive Capital filed paperwork with the SEC indicating it had successfully closed $350 million for its third flagship venture capital fund.
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The fund’s assets are split between two entities: Drive Capital Fund III, L.P. (holding $249.425 million raised from 61 investors) and Drive Capital Fund III (TE), L.P. (holding $100.575 million from 22 investors).
According to the filings, Drive Capital received its first concrete capital commitment for Fund III on April 5, 2019. It’s the firm’s largest investment vehicle yet. Drive Capital closed $300 million for Fund II in 2016 and $250 million for its inaugural fund in 2014.
Headquartered in Columbus, Ohio, Drive Capital is among the largest Midwestern venture investors by assets under management. Like most VCs firms, Drive Capital tends to invest relatively close to home. According to Crunchbase data, over half of its portfolio companies are headquartered in either Ohio, Illinois, or Michigan.
Drive Capital has invested in the likes of Root Insurance (which Crunchbase News has covered in the past), Duolingo, and Udacity, among others. Its exits include HR tech solution Gild (acquired by Chicago hedge fund Citadel), retail intelligence toolkit Channel IQ (bought by Market Track), restaurant front desk platform Nowait (acquired by Yelp for $40 million), and travel planning app Roadtrippers (which Togo Group bought in 2018).
Drive Capital makes the majority of its first investments at Series A and Series B, and the firm invests in latter-stage rounds as well. To this end, Drive is also in the midst of raising capital for its first opportunity fund to bolster its follow-on and opportunistic late-stage investments.
The firm filed amended paperwork for Drive Capital Overdrive Fund I, L.P. and Drive Capital Overdrive Fund I (TE), L.P., alongside the updates to entities representing its flagship Fund III. For the Overdrive Fund, Drive Capital is targeting a total of $400 million, of which roughly $284.4 million has already been raised. Since Drive Capital made its initial filings for the Overdrive Fund back in April, the firm had raised an additional $33.5 million for that particular investment vehicle.
Alone, each of Drive Capital’s new funds are among the largest capital pools drawn in the previous year by Midwestern venture capital firms so far in 2019, according to Crunchbase data. At the end of last month, Chicago-based ARCH Venture Partners closed more than $635 million for its tenth flagship fund, which was oversubscribed from the initial $600 million target Crunchbase News broke in October 2018. Winslow Capital, a growth-stage firm based in Minneapolis, is targeting $400 million of its second fund, according to paperwork filed last month.
This being said, Drive Capital is one of the most-funded Midwestern investors focused on early-stage deals operating in the market today. With new capital to deploy, it’s likely to remain a fixture in the region for some time to come.
Illustration: Li-Anne Dias